WARRIOR MET COAL, INC.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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ITEM 2. MANAG EMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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The following discussion and analysis provides a narrative of our results of operations and financial condition for the three and six months ended June 30, 2025 and June 30, 2024. You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this Form 10-Q and the audited financial statements for the year ended December 31, 2024 included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report"). Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis. Please see“Forward-Looking Statements.”

Current wording

The following discussion and analysis provides a narrative of our results of operations and financial condition for the three and nine months ended September 30, 2025 and September 30, 2024. You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this Form 10-Q and the audited financial statements for the year ended December 31, 2024 included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report"). Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis. Please see“Forward-Looking Statements.”

Previous wording

We are a U.S.-based, environmentally and socially minded supplier to the global steel industry. We are dedicated entirely to mining non-thermal steelmaking coal used as a critical component of steel production by metal manufacturers in Europe, South America and Asia. We are a large-scale, low-cost producer and exporter of premium quality steelmaking coal, also known as hard coking coal (“HCC”), operating highly-efficient longwall operations in our underground mines based in Alabama, Mine No. 4 and Mine No. 7. We also are developing our world-class Blue Creek mine based in Alabama.

Current wording

We are a U.S.-based, environmentally and socially minded supplier to the global steel industry. We are dedicated entirely to mining non-thermal steelmaking coal used as a critical component of steel production by metal manufacturers in Europe, South America and Asia. We are a large-scale, low-cost producer and exporter of premium quality steelmaking coal, also known as hard coking coal (“HCC”), operating highly-efficient longwall operations in our underground mines based in Alabama, Mine No. 4 and Mine No. 7. We also commenced longwall operations at our transformational Blue Creek mine based in Alabama eight months ahead of schedule in October 2025.

Previous wording

As of December 31, 2024, based on a reserve report prepared by Marshall Miller & Associates, Inc. ("Marshall Miller"), Mine No. 4 and Mine No. 7, our two operating mines, had approximately 82.4 million metric tons of recoverable reserves and our undeveloped Blue Creek mine contained 69.0 million metric tons of recoverable reserves and 39.7 million metric tons of coal resources exclusive of reserves, which total 108.7 million metric tons. As a result of our high-quality coal, our Mine No. 7 steelmaking coal realized price has historically been in line with, or at a slight discount to, the Platts Premium Low Volatility ("LV") Free-On-Board Australia Index Price (the "S&P Platts Index"). Our Mine No. 4 steelmaking coal is a High Volatility A ("HVA") quality that typically trades at a larger discount to the price of coal from Mine No. 7. We now primarily target the LV hard coking coal indices price for our Mine No. 4 and Blue Creek mine coal. Our steelmaking coal, mined from the Southern Appalachian portion of the Blue Creek coal seam, is characterized by low sulfur, low-to-medium ash, and Low Vol to High Vol. These qualities make our coal ideally suited as a coking coal for the manufacture of steel.

Current wording

As of December 31, 2024, based on a reserve report prepared by Marshall Miller & Associates, Inc. ("Marshall Miller"), Mine No. 4 and Mine No. 7, had approximately 82.4 million metric tons of recoverable reserves and our Blue Creek mine contained 69.0 million metric tons of recoverable reserves and 39.7 million metric tons of coal resources exclusive of reserves, which total 108.7 million metric tons. As a result of our high-quality coal, our Mine No. 7 steelmaking coal realized price has historically been in line with, or at a slight discount to, the Platts Premium Low Volatility ("LV") Free-On-Board Australia Index Price (the "S&P Platts Index"). Our Mine No. 4 and Blue Creek steelmaking coal are a High Volatility A ("HVA") quality that typically trades at a larger discount to the price of coal from Mine No. 7. We now primarily target the LV hard coking coal indices price for our Mine No. 4 and Blue Creek mine coal. Our steelmaking coal, mined from the Southern Appalachian portion of the Blue Creek coal seam, is characterized by low sulfur, low-to-medium ash, and Low Vol to High Vol. These qualities make our coal ideally suited as a coking coal for the manufacture of steel.

Previous wording

On February 21, 2025, we provided an update on the Blue Creek project. Due to the implementation of innovative technologies and best practices we increased nameplate capacity of the Blue Creek mine 25% to 5.4 million metric tons from the original production plan of 4.4 million metric tons. The additional capacity increases our overall nameplate capacity by 75%, from 7.3 million metric tons per year to 12.7 million metric tons per year. We also have the ability to increase the nameplate capacity 83% or an additional 0.6 million metric tons to 6.0 million metric tons per year by adding an additional continuous miner unit. We expect the addition of Blue Creek to enhance our already advantageous position on the global cost curve, improve our profitability and cash flow generation, and cement our position as a leading pure play steelmaking coal producer.

Current wording

On February 21, 2025, we provided an update on the Blue Creek project. Due to the implementation of innovative technologies and best practices we increased nameplate capacity of the Blue Creek mine 25% to 5.4 million metric tons from the original production plan of 4.4 million metric tons. The additional capacity increases our overall nameplate capacity by 75%, from 7.3 million metric tons per year to 12.7 million metric tons per year. We also have the ability to increase our overall nameplate capacity to 83% or an additional 0.6 million metric tons to 6.0 million metric tons per year by adding an additional continuous miner unit. We expect the addition of Blue Creek to enhance our already advantageous position on the global cost curve, improve our profitability and cash flow generation, and cement our position as a leading pure play steelmaking coal producer.

Previous wording

As a result of excellent progress made so far in 2025 in completing certain milestones ahead of schedule, the project is now ahead of schedule with the longwall anticipated to start up early in the first quarter of 2026. We expect to produce approximately 900 thousand metric tons in 2025 of which we have produced 543 thousand metric tons to date. Due to the accelerated startup of the longwall we now expect to produce approximately 3.6 million metric tons in 2026 an increase from the original estimated 2.7 million metric tons and approximately 4.4 million metric tons in 2027.

Current wording

We commenced longwall operations at the Blue Creek mine eight months ahead of schedule and on budget in October 2025 and expect the commissioning towards full production to be completed in early 2026. Due to the accelerated startup of the longwall, we expect to produce approximately 1.6 million metric tons in 2025, of which we have produced 702 thousand metric tons as of September 30, 2025 and expect to produce approximately 4.1 to 4.4 million metric tons in 2026, which is an increase from the original estimated 2.7 million metric tons.

Previous wording

In the second quarter of 2025, we also achieved a great milestone in the development of the Blue Creek project, by selling 217 thousand metric tons of steelmaking coal, which were the first commercial sales from this project, ahead of schedule. This milestone marks a critical inflection point in the development of this premier asset, representing the beginning of a transition from capital investment to revenue generations. We also continued to make excellent progress towards completing the Blue Creek project as we completed the installation of the truck dump, rail loadout and module A of the preparation plant, which allowed us the ability to send the first trainloads of steelmaking coal to the Port of Mobile in Alabama for our first shipments to customers. We have invested approximately $823.5 million in the project to date, including $51.8 million in the second quarter of 2025 and $107.0 million year-to-date. We expect to spend $225 to $250 million in 2025 on the continued development of Blue Creek. Our baseline total project cost estimate ranges from $995 million to $1.075 billion.

Current wording

Other significant milestones achieved in the development of the Blue Creek project were the completion and installation of the Blue Creek overland clean coal belt along with the remaining modules of the preparation plant in October 2025, and made significant progress on the barge loadout facility. We have invested approximately $887.7 million in the project to date, including $64.2 million in the third quarter of 2025 and $171.2 million year-to-date. We remain on budget and expect to spend a total of $225 to $250 million in 2025 on the continued development of Blue Creek. Our baseline total project cost estimate ranges from $995 million to $1.075 billion. We expect to have largely spent any remaining amounts for Blue Creek after the end of the fiscal year by the end of the first quarter of 2026.

Previous wording

The second quarter of 2025 was marked by continued weakness in the global steelmaking coal industry, with premium low-vol index prices declining 24% from the prior year comparable quarter and 33% year-over-year. The platts premium low-vol index averaged $184.22 per metric ton for the second quarter of 2025 compared to $242.31 for the second quarter of 2024. The lower seaborne prices were driven by weak steel demand from China and India, trade and tariff uncertainties, a slowdown in global economic growth and seasonal demand decline. As of July 14, 2025, the Platts Index price for premium LV coal was $182.00 per metric ton. Per the Wood Mackenzie global metallurgical coal short-term outlook released in June 2025, premium LV coal is expected to remain under pressure driven by gradually recovering met coal supply from Australia and a seasonal slowdown in steel demand from India. Premium LV coal is expected to remain rangebound between $182.00 and $195.00 per metric ton for the remainder of the year.

Current wording

Weak market conditions continued into the third quarter of 2025 marked by continued weakness in the global steelmaking coal industry, with premium low-vol index prices declining 13% from the prior year comparable quarter and 27% year-over-year. The Platts Premium Low-Vol index averaged $183.51 per metric ton for the third quarter of 2025 compared to $210.67 for the third quarter of 2024. The lower seaborne prices were driven by weak steel demand from China and India, trade and tariff uncertainties, a slowdown in global economic growth and seasonal demand decline. As of October 10, 2025, the Platts index price for premium LV coal was $192.00 per metric ton. Despite the continued weakness of Premium Low-Vol index prices, second tier coals, such as HVA and LV hard coking coal, have seen a material improvement in price relative to Premium Low-Vol index prices, improving from a low of 76% of the Premium Low Vol index price in July 2025 to a high of 89% of the Premium Low Vol index price in September 2025. Per the Wood Mackenzie global metallurgical coal short-term outlook released in September 2025, a gradual firming is anticipated for premium LV coal, supported by the seasonal return of Indian buyers after the monsoon season. This seasonal restocking cycle, combined with resilient steel production, positions India as a pivotal source for near-term demand. Premium LV coal is expected to remain volatile but broadly rangebound between $185.00 and $195.00 per metric ton for the remainder of the year.

Previous wording

The United States government announced a broad range of tariffs on foreign goods imported into the U.S., with certain nations and regions responding with retaliatory tariffs on U.S. goods. The trade and tariff uncertainties have already contributed to lower seaborne prices. Any new tariffs as well as other trade measures that may be implemented by the U.S. or retaliatory trade measures or tariffs implemented by other countries could result in reduced economic activity, increased costs in operating our business, reduced demand and/or changes in purchasing behaviors for steelmaking coal, disruptions in our supply chain, material changes in the pricing of steelmaking coal, limits on trade with the U.S. or other potentially adverse economic outcomes. It is too early to quantify the impact of the tariffs on the Company's financial statements. We continue to analyze the impact of tariffs on our business and actions we can take to minimize their impact.

Current wording

The United States government continues to engage in a broad range of tariffs on foreign goods imported into the U.S., with certain nations and regions responding with retaliatory tariffs on U.S. goods. The trade and tariff uncertainties have continued to contribute to lower seaborne prices. Any new tariffs as well as other trade measures that may be implemented by the U.S. or retaliatory trade measures or tariffs implemented by other countries could result in reduced economic activity, increased costs in operating our business, reduced demand and/or changes in purchasing behaviors for steelmaking coal, disruptions in our supply chain, material changes in the pricing of steelmaking coal, limits on trade with the U.S. or other potentially adverse economic outcomes. It is too early to quantify the impact of the tariffs on the Company's financial statements. We continue to analyze the impact of tariffs on our business and actions we can take to minimize their impact.

Previous wording

We define Segment Adjusted EBITDA as net income (loss) adjusted for other revenues; cost of other revenues; depreciation and depletion expense; selling, general and administrative expenses; interest income, net; income tax expense (benefit) and certain transactions or adjustments that the Chief Executive Officer, our Chief Operating Decision Maker, does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance. Segment Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

Current wording

We define Segment Adjusted EBITDA as net income adjusted for other revenues; cost of other revenues; depreciation and depletion expense; selling, general and administrative expenses; interest income, net; income tax expense (benefit) and certain transactions or adjustments that the Chief Executive Officer, our Chief Operating Decision Maker, does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance. Segment Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

Previous wording

We define Adjusted EBITDA as net income (loss) before interest income, net, income tax expense (benefit), depreciation and depletion, non-cash asset retirement obligation accretion, non-cash stock compensation expense, other non-cash accretion, mark-to-market (gain) loss on gas hedges and business interruption expenses. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

Current wording

We define Adjusted EBITDA as net income before interest income, net, income tax (benefit) expense, depreciation and depletion, non-cash asset retirement obligation accretion, non-cash stock compensation expense, other non-cash accretion, mark-to-market gain on gas hedges and business interruption expenses. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

Previous wording

We believe that the presentation of Adjusted EBITDA in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to Adjusted EBITDA is net income (loss). Adjusted EBITDA should not be considered an alternative to net income (loss) or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjustments exclude some, but not all, items that affect net income (loss) and our presentation of Adjusted EBITDA may vary from that presented by other companies.

Current wording

We believe that the presentation of Adjusted EBITDA in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to Adjusted EBITDA is net income. Adjusted EBITDA should not be considered an alternative to net income or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjustments exclude some, but not all, items that affect net income and our presentation of Adjusted EBITDA may vary from that presented by other companies.

Previous wording

The following table presents a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated.

Current wording

The following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated.

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(1)Represents non-cash accretion expense associated with our asset retirement obligations.

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Represents non-cash accretion expense associated with our asset retirement obligations.

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(2)Represents non-cash stock compensation expense associated with equity awards.

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Represents non-cash stock compensation expense associated with equity awards.

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(3)Represents non-cash accretion expense associated with our black lung obligations.

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Represents non-cash accretion expense associated with our black lung obligations.

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(4)Represents mark-to-market (gain) loss recognized on gas hedges.

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Represents mark-to-market gain recognized on gas hedges.

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(5)Represents business interruption expenses associated with the labor strike.

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Represents business interruption expenses associated with the labor strike.

Previous wording

We produced 2.1 million metric tons of steelmaking coal for the three months ended June 30, 2025 compared to 2.0 million metric tons for the three months ended June 30, 2024, representing a 6% increase. The increased production was driven by 316 thousand metric tons produced by three continuous miner units at the Blue Creek mine developing the initial longwall panel partially offset by a decrease of 191 thousand metric tons produced at the legacy mines.

Current wording

We produced 2.0 million metric tons of steelmaking coal for the three months ended September 30, 2025 compared to 1.7 million metric tons for the three months ended September 30, 2024, representing a 17.3% increase. The increased production was driven by an increase of 176 thousand metric tons at the legacy mines and an increase of 123 thousand metric tons produced by three continuous miner units at the Blue Creek mine developing the initial longwall panel.

Previous wording

Sales for the three months ended June 30, 2025 were $288.5 million compared to $390.4 million for the three months ended June 30, 2024. The $101.9 million decrease in sales was primarily driven by a $124.3 million decrease in sales related to a $61.74 per metric ton decrease in the average net selling price per metric ton of our steelmaking coal offset partially by a $22.4 million increase in sales due to a 6% increase in steelmaking coal sales volume. The average net selling price of our steelmaking coal decreased $61.74 from $205.05 per metric ton in the second quarter of 2024 to $143.31 per metric ton in the second quarter of 2025.

Current wording

Sales for the three months ended September 30, 2025 were $320.0 million compared to $319.9 million for the three months ended September 30, 2024. The $0.1 million increase in sales was primarily driven by an $85.1 million increase in sales due to a 26.6% increase in steelmaking coal sales volume primarily due to Blue Creek sales of 343 thousand metric tons offset partially by an $85.1 million decrease in sales related to a $39.81 per metric ton decrease in the average net selling price per metric ton of our steelmaking coal. The average net selling price of our steelmaking coal decreased $39.81 from $189.54 per metric ton in the third quarter of 2024 to $149.73 per metric ton in the third quarter of 2025.

Previous wording

For the six months ended June 30, 2025, our geographic customer sales volume mix was 47% in Asia, 37% in Europe and 16% in South America. For the six months ended June 30, 2024, our geographic customer sales volume mix was 44% in Asia, 37% in Europe, 18% in South America and 1% in the United States. Our geographic customer mix typically varies each period based on the timing of customer orders and shipments.

Current wording

For the three months ended September 30, 2025, our geographic customer sales volume mix was 43% in Europe, 38% in Asia, 18% in South America and 1% in the United States. For the three months ended September 30, 2024, our geographic customer sales volume mix was 44% in Europe, 41% in Asia, 15% in South America and 1% in the United States. Our geographic customer mix typically varies each period based on the timing of customer orders and shipments.

Previous wording

Other revenues for the three months ended June 30, 2025 were $9.0 million compared to $6.1 million for the three months ended June 30, 2024. Other revenues are comprised of revenue derived from our natural gas operations, gains on sales and disposals of property, plant and equipment and land, changes in the fair value of our natural gas swap contracts and earned royalty revenue. The $2.9 million increase in other revenues is primarily driven by gains on mark-to-market gas hedges of $1.3 million, and an increase in the Southern Louisiana natural gas price average per Million British Thermal Unit ("MMBtu") of 70% offset partially by a decrease in natural gas sales volumes of 6% for the three months ended June 30, 2025 as compared to the prior year comparable period.

Current wording

Other revenues for the three months ended September 30, 2025 were $8.6 million compared to $7.8 million for the three months ended September 30, 2024. Other revenues are comprised of revenue derived from our natural gas operations, gains on sales and disposals of property, plant and equipment and land, changes in the fair value of our natural gas swap contracts and earned royalty revenue. The $0.8 million increase in other revenues is primarily driven by gains on mark-to-market gas hedges of $0.7 million, and an increase in the Southern Louisiana natural gas price average per Million British Thermal Unit ("MMBtu") of 46% offset partially by a decrease in natural gas sales volumes of 1% for the three months ended September 30, 2025 as compared to the prior year comparable period.

Previous wording

Cost of sales was $226.4 million, or 76.1% of total revenues, for the three months ended June 30, 2025, compared to $261.3 million, or 65.9% of total revenues for the three months ended June 30, 2024. The $34.9 million decrease is primarily driven by a $50.1 million decrease due to a $24.86 per metric ton decrease in cash cost of sales per metric ton due to lower average net selling prices of steelmaking coal and its impact on our labor, transportation and royalty costs; the sales mix of Blue Creek coal with its inherent lower cost structure; our disciplined approach to cost control and an increase in tons produced. The decrease in costs of sales is offset partially by a 109 thousand metric ton increase in steelmaking coal sales volume. For the three months ended June 30, 2025, cost of production represented 67% of cost of sales and transportation and royalties accounted for approximately 33% compared to cost of production of 61% and transportation and royalties of 39% for the three months ended June 30, 2024.

Current wording

Cost of sales was $239.5 million, or 72.9% of total revenues, for the three months ended September 30, 2025, compared to $231.6 million, or 70.7% of total revenues for the three months ended September 30, 2024. The $7.9 million increase is primarily driven by a $61.1 million increase due to a 449 thousand metric ton increase in steelmaking coal sales volume offset partially by a $53.6 million decrease due to a $25.10 per metric ton decrease in cash cost of sales per metric ton due to lower average net selling prices of steelmaking coal and its impact on our labor, transportation and royalty costs; the sales mix of Blue Creek coal with its inherent lower cost structure; our disciplined approach to cost control and an increase in tons produced. For the three months ended September 30, 2025, cost of production represented 67% of cost of sales and transportation and royalties accounted for approximately 33% compared to cost of production of 66% and transportation and royalties of 34% for the three months ended September 30, 2024.

Previous wording

Cost of other revenues was $8.2 million or 2.8% of total revenues, for the three months ended June 30, 2025, compared to $10.7 million, or 2.7% of total revenues for three months ended June 30, 2024. The decrease is primarily driven by the reduction of gas compression costs in operations and a 6% decrease in gas sales volumes.

Current wording

Cost of other revenues was $7.5 million or 2.3% of total revenues, for the three months ended September 30, 2025, compared to $8.9 million, or 2.7% of total revenues for three months ended September 30, 2024. The decrease is primarily driven by the reduction of gas compression costs and a 1% decrease in gas sales volumes.

Previous wording

Depreciation and depletion expenses were $43.3 million, or 14.5% of total revenues, for the three months ended June 30, 2025, compared to $38.2 million, or 9.6% of total revenues for the three months ended June 30, 2024. The $5.1 million increase in depreciation and depletion is primarily driven by an increase in additional assets placed into service at Blue Creek combined with a 6% increase in steelmaking coal sales volume as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold.

Current wording

Depreciation and depletion expenses were $43.6 million, or 13.3% of total revenues, for the three months ended September 30, 2025, compared to $36.6 million, or 11.2% of total revenues for the three months ended September 30, 2024. The $7.0 million increase in depreciation and depletion is primarily driven by an increase in additional assets placed into service at Blue Creek combined with a 26.6% increase in steelmaking coal sales volume as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold.

Previous wording

Selling, general and administrative expenses were $11.9 million, or 4.0% of total revenues, for the three months ended June 30, 2025, compared to $15.5 million, or 3.9% of total revenues, for the three months ended June 30, 2024. The $3.6 million decrease in selling, general and administrative expenses for the period is primarily due to a decrease in employee related expenses combined with our continued focus on tightly managing expenses across the business.

Current wording

Selling, general and administrative expenses were $17.2 million, or 5.2% of total revenues, for the three months ended September 30, 2025, compared to $11.5 million, or 3.5% of total revenues, for the three months ended September 30, 2024. The $5.7 million increase in selling, general and administrative expenses for the period is primarily due to an increase in employee related expenses.

Previous wording

Interest expense was $2.9 million, or 1.0% of total revenues, for the three months ended June 30, 2025, compared to interest expense of $0.9 million, or 0.2% of total revenues, for the three months ended June 30, 2024. The $2.0 million increase is due to an increase in interest on newly leased equipment.

Current wording

Interest expense was $2.3 million, or 0.7% of total revenues, for the three months ended September 30, 2025, compared to interest expense of $1.4 million, or 0.4% of total revenues, for the three months ended September 30, 2024. The $0.9 million increase is due to an increase in interest on newly leased equipment.

Previous wording

Interest income was $5.1 million, or 1.7% of total revenues for the three months ended June 30, 2025, compared to $9.2 million, or 2.3% of total revenues for the three months ended June 30, 2024. The $4.2 million decrease was primarily driven by a decrease in invested cash balances and lower rates of return earned on our investments.

Current wording

Interest income was $4.4 million, or 1.3% of total revenues for the three months ended September 30, 2025, compared to $8.7 million, or 2.6% of total revenues for the three months ended September 30, 2024. The $4.2 million decrease was primarily driven by a decrease in invested cash balances and lower rates of return earned on our investments.

Previous wording

For the three months ended June 30, 2025, we recognized income tax expense of$4.3 million comp ared to income tax expense of $8.5 million for the three months ended June 30, 2024. We estimated our annual effective tax rate and applied this effective tax rate to our year-to-date pretax income at the end of the interim reporting period. The $4.3 million income tax expense for the three months ended June 30, 2025, includes a benefit related to depletion, Internal Revenue Code ("IRC") Section 250 Deduction: Foreign-Derived Intangible Income ("FDII") and Section 45l Deduction: Marginal Well Credit.

Current wording

For the three months ended September 30, 2025, we recognized an income tax benefit of $13.7 million compared to income tax expense of $4.6 million for the three months ended September 30, 2024. We estimated our annual effective tax rate and applied this effective tax rate to our year-to-date pretax income at the end of the interim reporting period. The $13.7 million income tax benefit for the three months ended September 30, 2025, is primarily due to tax benefits related to depletion, marginal gas well credits and a discrete return to provision adjustment related to a tax accounting election change in Internal Revenue Code ("IRC") Section 250 Deduction: Foreign-Derived Intangible Income ("FDII") deductions.

Previous wording

The OBBBA was enacted on July 4, 2025, and updated the IRC Section 250 Deduction: FDII to FDDEI, which provides for, among other things, a permanent deduction of 33.34% of FDDEI, which reduces the statutory tax rate to 14% of such income. The changes will take effect for taxable years beginning after December 31, 2025. The Marginal Well Credit is a production-based tax credit that provides a credit for qualified natural gas production and is phased out when natural gas prices exceed certain thresholds.

Current wording

The OBBBA was enacted on July 4, 2025, and updated the FDII to FDDEI, which provides for, among other things, a permanent deduction of 33.34% of FDDEI, which reduces the statutory tax rate to 14% of such income. The changes will take effect for taxable years beginning after December 31, 2025. The marginal well credit is a production-based tax credit that provides a credit for qualified natural gas production and is phased out when natural gas prices exceed certain thresholds.

Previous wording

We produced 4.1 million metric tons of steelmaking coal for the six months ended June 30, 2025 compared to 3.8 million metric tons for the six months ended June 30, 2024, representing an 8% increase. The increased production was driven by 543 thousand metric tons produced by three continuous miner units at the Blue Creek mine developing the initial longwall panel.

Current wording

We produced 6.2 million metric tons of steelmaking coal for the nine months ended September 30, 2025 compared to 5.6 million metric tons for the nine months ended September 30, 2024, representing an 10.9% increase. The increased production was driven by an increase of 667 thousand metric tons produced by three continuous miner units at the Blue Creek mine developing the initial longwall panel.

Previous wording

Sales for the six months ended June 30, 2025 were $583.4 million compared to $888.4 million for the six months ended June 30, 2024. The $305.0 million or 34% decrease in sales was primarily driven by a $339.3 million decrease in sales related to a 37% or $85.18 per metric ton decrease in the average net selling price per metric ton of steelmaking coal offset partially by a $34.3 million increase in sales due to a 4% or 0.1 million metric ton increase in steelmaking coal sales volume. The 4% increase in sales volumes was driven by the first commercial sales of 217 thousand metric tons of Blue Creek steelmaking coal ahead of schedule.

Current wording

Sales for the nine months ended September 30, 2025 were $903.4 million compared to $1,208.4 million for the nine months ended September 30, 2024. The $305.0 million or 25.2% decrease in sales was primarily driven by a $435.6 million decrease in sales related to a 32.5% or $71.18 per metric ton decrease in the average net selling price per metric ton of steelmaking coal offset partially by a $130.6 million increase in sales due to a 10.8% or 597 thousand metric ton increase in steelmaking coal sales volume. The 10.8% increase in sales volumes was driven by sales of 560 thousand metric tons of Blue Creek steelmaking coal.

Previous wording

For the three months ended June 30, 2025, our geographic customer sales volume mix was 52% in Asia, 37% in Europe, and 11% in South America. For the three months ended June 30, 2024, our geographic customer sales volume mix was 41% in Asia, 38% in Europe and 21% in South America. Our geographic customer mix typically varies each period based on the timing of customer orders and shipments.

Current wording

For the nine months ended September 30, 2025, our geographic customer sales volume mix was 44% in Asia, 39% in Europe, 16% in South America and 1% in the United States. For the nine months ended September 30, 2024, our geographic customer sales volume mix was 43% in Asia, 39% in Europe, 17% in South America and 1% in the United States. Our geographic customer mix typically varies each period based on the timing of customer orders and shipments.

Previous wording

Other revenues for the six months ended June 30, 2025 were $14.0 million compared to $11.6 million for the six months ended June 30, 2024. Other revenues are comprised of revenue derived from our natural gas operations, gains on sales and disposals of property, plant and equipment and land, changes in the fair value of our natural gas swap contracts, as well as earned royalty revenue. The $2.4 million increase in other revenues is due to the increase in the Southern Louisiana natural gas price average of 66% offset partially by a decrease in sales volume of 5% and losses on mark-to-market gas hedges of$0.4 million for the six months ended June 30, 2025.

Current wording

Other revenues for the nine months ended September 30, 2025 were $22.7 million compared to $19.4 million for the nine months ended September 30, 2024. Other revenues are comprised of revenue derived from our natural gas operations, gains on sales and disposals of property, plant and equipment and land, changes in the fair value of our natural gas swap contracts, as well as earned royalty revenue. The $3.3 million increase in other revenues is due to an increase in the Southern Louisiana natural gas price average of 59% and gains on mark-to-market gas hedges of $0.3 million offset partially by a decrease in sales volume of 4% for the nine months ended September 30, 2025.

Previous wording

Cost of sales (exclusive of items shown separately below) was $472.1 million, or 79.0%, of total revenues, for the six months ended June 30, 2025, compared to $546.9 million, or 60.8% of total revenues for the six months ended June 30, 2024. The $74.7 million decrease is primarily driven by a $96.3 million decrease due to a $24.19 per metric ton decrease in cash cost of sales per metric ton offset partially by a $21.0 million increase due to a 4% or 0.1 million metric ton increase in steelmaking coal sales volume. The $96.3 million decrease in cash cost of sales per metric ton is due to lower average net selling prices of steelmaking coal and its impact on our labor, transportation and royalty costs; the sales mix of Blue Creek coal and its inherent lower cost structure; our disciplined approach to cost control and an increase in tons produced. For the six months ended June 30, 2025, cost of production represented 67% of cost of sales and transportation and royalties accounted for approximately 33% compared to cost of production of 61% and transportation and royalties of 39% for the six months ended June 30, 2024.

Current wording

Cost of sales (exclusive of items shown separately below) was $711.7 million, or 76.8%, of total revenues, for the nine months ended September 30, 2025, compared to $778.5 million, or 63.4% of total revenues for the nine months ended September 30, 2024. The $66.8 million decrease is primarily driven by a $151.5 million decrease due to a $24.75 per metric ton decrease in cash cost of sales per metric ton offset partially by an $83.6 million increase due to a 10.8% or 597 thousand metric ton increase in steelmaking coal sales volume. The $151.5 million decrease in cash cost of sales per metric ton is due to lower average net selling prices of steelmaking coal and its impact on our labor, transportation and royalty costs; the sales mix of Blue Creek coal and its inherent lower cost structure; our disciplined approach to cost control and an increase in tons produced. For the nine months ended September 30, 2025, cost of production represented 67% of cost of sales and transportation and royalties accounted for approximately 33% compared to cost of production of 63% and transportation and royalties of 37% for the nine months ended September 30, 2024.

Previous wording

Depreciation and depletion expenses were $88.5 million, or 14.8% of total revenues, for the six months ended June 30, 2025, compared to $78.2 million, or 8.7%, for the six months ended June 30, 2024. The $10.4 million increase in depreciation and depletion is primarily driven by additional assets placed into service at Blue Creek and a 4% or 0.1 million metric ton increase in steelmaking coal sales volume as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold.

Current wording

Depreciation and depletion expenses were $132.1 million, or 14.3% of total revenues, for the nine months ended September 30, 2025, compared to $114.8 million, or 9.4% of total revenues, for the nine months ended September 30, 2024. The $17.3 million increase in depreciation and depletion is primarily driven by additional assets placed into service at Blue Creek and a 10.8% or 597 thousand metric ton increase in steelmaking coal sales volume as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold.

Previous wording

Selling, general and administrative expenses were $30.4 million, or 5.1% of total revenues, for the six months ended June 30, 2025, compared to $34.4 million, or 3.8% of total revenues, for the six months ended June 30, 2024. The $4.0 million decrease in selling, general and administrative expenses for the period is primarily due to a decrease in employee related expenses combined with our continued focus on tightly managing expenses across the business.

Current wording

Selling, general and administrative expenses were $47.6 million, or 5.1% of total revenues, for the nine months ended September 30, 2025, compared to $45.9 million, or 3.7% of total revenues, for the nine months ended September 30, 2024. The $1.7 million increase in selling, general and administrative expenses for the period is primarily due to an increase in employee related expenses.

Previous wording

Interest expense was $5.0 million, or 0.8% of total revenues, for the six months ended June 30, 2025, compared to $2.0 million, or 0.2% of total revenues, for the six months ended June 30, 2024. The $3.0 million increase is due an increase in interest on newly leased equipment.

Current wording

Interest expense was $7.3 million, or 0.8% of total revenues, for the nine months ended September 30, 2025, compared to $3.5 million, or 0.3% of total revenues, for the nine months ended September 30, 2024. The $3.8 million increase is due an increase in interest on newly leased equipment.

Previous wording

Interest income was $10.4 million, or 1.7% of total revenues for the six months ended June 30, 2025, compared to $17.4 million, or 1.9%, of total revenues for the six months ended June 30, 2024. The $7.0 million decrease was primarily driven by a decrease in invested cash balances and lower rates of return earned on our investments.

Current wording

Interest income was $14.8 million, or 1.6% of total revenues for the nine months ended September 30, 2025, compared to $26.1 million, or 2.1%, of total revenues for the nine months ended September 30, 2024. The $11.3 million decrease was primarily driven by a decrease in invested cash balances and lower rates of return earned on our investments.

Previous wording

We recognized income tax benefit of $1.7 million and income tax expense of $27.6 million for the six months ended June 30, 2025 and June 30, 2024, respectively. We estimated our annual effective tax rate and applied this effective tax rate to our year-to-date pretax loss at the end of the interim reporting period. The $1.7 million income tax benefit for the six months ended June 30, 2025 includes a benefit related to depletion, Internal Revenue Code ("IRC") Section 250 Deduction: Foreign-Derived Intangible Income ("FDII") and Section 45l Deduction: Marginal Well Credit.

Current wording

We recognized income tax benefit of $15.5 million and income tax expense of $32.2 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. We estimated our annual effective tax rate and applied this effective tax rate to our year-to-date pretax loss at the end of the interim reporting period. The effective income tax rate for the nine months ended September 30, 2025 varied from the statutory federal income tax rate of 21%, primarily due to tax benefits related to depletion, marginal gas well credits and a discrete return to provision adjustment related to a tax accounting election change in FDII deductions.